esm7i The accession of China to the World Trade Organization has global significance. China is on track to become a global economic superpower. This will have a profound impact on the competitiveness of multinational and small corporations.
China’s growth is astounding, and the domestic market promises to explode. What will it take for you to capture this market?
Two experts share their thoughts on how to sell in China.
Dr. Tamara Monosoff founded ScoutAsia – a pan-Asian consulting company with headquarters in Hong Kong. She later relocated to the United States. The company offered industry research, logistic management, and access to a network of expert consultants to companies and organizations looking to expand in Asian markets. Dr. Monosoff currently operates Mom Inventors, Inc., based out of Walnut Creek, California.
1. Don’t assume Chinese buyers won’t be looking at alternatives. You may have to modify your product or service to meet local interests or needs. Meeting people in Asia is important before entering the market. Senior executives are very accessible. Government and quasi-government organizations in Asia can help you. There are also free consulting services and other ways to introduce people.
2. Hong Kong is a great place to start if you want to enter China. It has a stable legal and financial system, a flat 15% tax rate, and it’s easy to set up a business. You can also hire local executives and consultants who are trilingual (English, Mandarin, Cantonese).
3. The styles of negotiation between the US and China are vastly different. It is important to show respect by using Mandarin or Cantonese and handing out your business cards with two hands. Negotiations in China are more reliant on relationships and consensus decisions than the American way of doing business. An American executive in Hong Kong nearly lost a deal because his Chinese counterparts let three deadlines pass. The deal was finally finalized after allowing more time for consensus-building, making minor contract changes, and offering a “lucky” price ending in “88.”
4. Cultivate “Zhong Jian ren” (the intermediary) because a gifted Chinese go-between is indispensable even after the initial meeting. It is important to cultivate the “Zhong Jian” (intermediary) as a talented Chinese intermediary will be critical, even after the initial meeting.
5. Help your family’s companies. Many Chinese firms would love to enter the American marketplace. You may find that they are more likely to accept you into their network if you help them. A person who has the most “guanxi,” or personal connections, will thrive.
6. You may be able to help them one day. Mention it if you are able to justify paying an upfront referral fee. You may get a no. Insist on doing it if you think that it is a good idea. The Chinese, like many other nationalities, aren’t as direct as Americans. No doesn’t always mean no. Two Chinese can carry on insisting and refusing the game for a long time before one party gives up.
7. You can bend the rules for certain situations and people. Persistence, endurance, and patience are all qualities that will help you to influence the outcome. Although the Chinese may not respond to you and seem uninterested in your offer, it’s your effort that will get noticed.
8. You can also recognize this slower pace by meeting with potential business partners for lunch or dinner. In China, meals are longer than they are in the West. Be flexible and patient. Time spent with others is an investment that will reap rewards in the future.
9. Respect and discretion are essential. Online or offline, no Chinese will want to do business with anyone who does not respect the way they live and conduct their business. Be careful about your views on government and politics. If you are not very close to the Chinese, they may not be willing to tell you their true opinion about government policies.
10. Build desirability. To build a large, profitable presence in China, you need to offer products of high quality that are accessible to all. It is essential to create desirability. To determine which products will appeal to the most consumers and best fit the local culture, you need to get to understand your customers.
